MindAIGold.id — Gold prices remained under pressure in early Asian trading on Tuesday (October 6), with XAU/USD hovering around US$4,140 per ounce. A stronger U.S. dollar and elevated Treasury yields continued to limit gold's recovery, despite growing expectations that the Federal Reserve may hold off on another interest-rate hike.

The gold market is currently facing conflicting signals. On one side, weakening U.S. labor-market data has reduced expectations for tighter monetary policy. On the other, surging Treasury yields continue to increase the appeal of interest-bearing assets over gold.

-Treasury Yields Keep Gold Under Pressure

U.S. Treasury yields remain one of the biggest obstacles to a sustained gold price recovery.

The 10-year Treasury yield briefly climbed to around 5.35%, its highest level since 2002, before easing slightly. Meanwhile, the 30-year Treasury yield also moved above 5.70%, reaching levels not seen since 2002.

Higher Treasury yields typically create headwinds for gold because the precious metal does not offer interest income. As bond yields rise, investors may shift toward fixed-income assets, reducing demand for non-yielding assets such as gold.

The stronger U.S. dollar has added another layer of pressure on XAU/USD, making gold more expensive for holders of other currencies.

-Weak NFP Data Reduces Fed Rate Hike Expectations

Despite the pressure from yields, the outlook for Federal Reserve policy has become increasingly important for the gold market.

The September Nonfarm Payrolls (NFP) report showed that the U.S. economy added only 29,000 jobs. Previous employment figures were also revised lower, suggesting that momentum in the U.S. labor market is beginning to weaken.

The disappointing jobs data has significantly reduced expectations for another Fed rate hike in October. Market pricing now puts the probability of an October hike at around 22.7%, down sharply from approximately 70% a week earlier.

A further decline in rate-hike expectations could eventually weaken the U.S. dollar and Treasury yields, potentially creating a stronger environment for gold to rebound.

-FOMC Minutes Become the Next Major Catalyst

Market attention is now shifting toward the FOMC Minutes, which are scheduled for release on Wednesday.

The minutes from the September Federal Reserve meeting could provide fresh clues about policymakers' views on inflation, economic growth, and the U.S. labor market.

If the minutes reveal growing concerns over weakening employment conditions, investors could increase bets that the Fed will adopt a less aggressive policy stance. Such a scenario could weigh on the U.S. dollar and Treasury yields, giving gold prices and XAU/USD more room to recover.

However, a hawkish tone from Fed officials could trigger the opposite reaction. Higher rate expectations could push Treasury yields and the dollar higher, potentially extending selling pressure on gold.

-Gold Outlook: XAU/USD Faces a Critical Test

For now, gold remains caught between two opposing forces: weaker expectations for another Fed rate hike and persistently elevated Treasury yields.

The reaction of the U.S. dollar and Treasury yields following the release of the FOMC Minutes could determine the next major direction for XAU/USD.

A dovish Fed message could open the door for a gold rebound, while a hawkish stance combined with higher yields could keep the precious metal under pressure.

For traders and investors, the US$4,140 area remains an important reference point as the market awaits fresh signals from the Federal Reserve.